FIDOCK -v- LEGAL PROFESSION COMPLAINTS COMMITTEE [2013] WASCA 108 (23 April 2013)

FIDOCK -v- LEGAL PROFESSION COMPLAINTS COMMITTEE [2013] WASCA 108 (23 April 2013) - WASCA 2013 case summary — Zoe

[118]

... The proposition you put is that in this case when Mr Argentieri died that would somehow cause Mrs Argentieri's interest in the moneys to evaporate. Is that the proposition that you put?---Yes, because the capital fell into his estate.

Yes, that's the contention you make, that the capital fell into his estate, but that puts the cart before the horse, because the real question is whether, as you contend, Mrs Argentieri's interest evaporated upon her husband's death, isn't it?---Yes.

Ordinarily, if people own money as a joint tenant, it is the person who dies whose interest evaporates on their death, and it succeeds to the other co-tenant?---That's right.

The proposition you put here is the opposite of that?---No, it's not. The capital was held in Mr Argentieri's sole name.

And Mrs Argentieri had an interest in the moneys?---She had an interest, yes.

And that interest evaporated on your evidence upon his death?---Yes.

What principle, what proposition of law, what authority do you rely on for that proposition? What legal process of reasoning do you rely on?---If a person owns an asset in their sole name and they die, that asset forms part of their deceased estate.

If they don't own the asset in their sole name, and someone else has an interest in the asset, it does not form part of their estate?---But he did own it in his sole name. That was confirmed to me by the bank.

JUDGE SHARP: While it was in the Telenet saver account?---Yes, sir.

But in the event that the money was transferred out of the Telenet saver account, it somehow became the joint property, because it went back into the joint account?---That's correct, sir.

...

CUERDEN, MR: I won't labour this point unnecessarily, but the analysis that you put forward depends on Mr Argentieri being the sole owner, and Mrs Argentieri having no interest in the money. Correct?---Well, it not being in her name. That's what it depends on.

Well, this is the point I asked you about earlier. I asked you earlier whether this expression of holding money in someone's name - how you understood that expression, and you understood it here to mean that he was in law the sole owner of the moneys?---Yes.

But you've agreed that she had an interest in the moneys. Correct?---While they were alive, yes.

I know you add that qualification, but she had an interest in the money while they were alive?---Yes.

And your proposition is that upon Mr Argentieri dying, she lost her interest in the money?---Yes.

Yes, I'm going to invite the Tribunal at the end of the day to reject that proposition, and find that there is absolutely no basis in law for that conclusion. Is there any particular principle or doctrine of law or authority that you want to bring to the Tribunal's attention to support that proposition, that upon Mr Argentieri dying, his wife lost her interest in the money?---Well, I wrote to the bank and they confirmed it (ts 42 - 44).

[124]

The evidence given by the respondent leads to the conclusion that Mrs Argentieri had an ongoing proprietary interest in the Telenet Account because it was not intended that she would lose all rights upon transfer of funds to the Telenet Account. It was intended that she could call for the return of Telenet Account funds. Once funds had been returned from the Telenet Account, they could be directly and independently accessed by her. The evidence in the respondent's statement is confirmed by the evidence given in crossexamination set out above.

The Tribunal notes that 'interests' can sometimes refer to matters which concern or affect a person and that the expression 'interest' was sometimes used in the evidence in this sense. 'Interest' can also be used to refer to the monies paid by banks on some bank deposits. Interest, in this sense, was paid on the Telenet Account and 'interest' was also used in this sense during the course of the evidence. The Tribunal is satisfied that these were not the sense in which 'interest' was used in the passages set out above.

The Tribunal is satisfied that Mrs Argentieri had an 'interest' in the Telenet Account funds and that this interest amounted to partial ownership of it.

The respondent argued that Mrs Argentieri's interest in the Telenet Account Funds came to an end when Mr Argentieri died. If this contention is correct, the respondent's affidavits were true and correct. However, the Tribunal considers that this contention is not correct. In crossexamination, the respondent was unclear about why Mrs Argentieri's interest should be extinguished on Mr Argentieri's death. His explanations in crossexamination were not in accordance with established legal principle. He appears to have placed great importance on the Telenet Account being in the 'name' of Mr Argentieri. For the reasons stated above, the name in which an account is held is not conclusive, at law, as between the parties.

The respondent also said that both Mr and Mrs Argentieri wanted the funds to form part of his estate on his death, not Mrs Argentieri's. However, simply opening an account in the name of Mr Argentieri would not have this effect if, as the Tribunal has found, the relevant intention was that Mrs Argentieri would continue to have an interest in the Telenet Account while she was alive.

In summary, the Tribunal considers that Mrs Argentieri had an interest in the funds in the Telenet Account at the time of Mr Argentieri's death and that her interest continued after Mr Argentieri's death. The affidavits were, therefore, misleading in relation to the Telenet Account [107] - [112].

[164]

... in the context of the accessory liability principle acting dishonestly, or with a lack of probity, which is synonymous, means simply not acting as an honest person would in the circumstances. This is an objective standard. At first sight this may seem surprising. Honesty has a connotation of subjectivity, as distinct from the objectivity of negligence. Honesty, indeed, does have a strong subjective element in that it is a description of a type of conduct assessed in the light of what a person actually knew at the time, as distinct from what a reasonable person would have known or appreciated. Further, honesty and its counterpart dishonesty are mostly concerned with advertent conduct, not inadvertent conduct. Carelessness is not dishonesty. Thus for the most part dishonesty is to be equated with conscious impropriety. However, these subjective characteristics of honesty do not mean that individuals are free to set their own standards of honesty in particular circumstances. The standard of what constitutes honest conduct is not subjective. Honesty is not an optional scale, with higher or lower values according to the moral standards of each individual. If a person knowingly appropriates another's property, he will not escape a finding of dishonesty simply because he sees nothing wrong in such behaviour.

...

In most situations there is little difficulty in identifying how an honest person would behave. Honest people do not intentionally deceive others to their detriment. Honest people do not knowingly take others' property. Unless there is a very good and compelling reason, an honest person does not participate in a transaction if he knows it involves a misapplication of trust assets to the detriment of the beneficiaries. Nor does an honest person in such a case deliberately close his eyes and ears, or deliberately not ask questions, lest he learn something he would rather not know, and then proceed regardless.

...

Acting in reckless disregard of others' rights or possible rights can be a telltale sign of dishonesty. An honest person would have regard to the circumstances known to him, including the nature and importance of the proposed transaction, the nature and importance of his role, the ordinary course of business, the degree of doubt, the practicability of the trustee or the third party proceeding otherwise and the seriousness of the adverse consequences to the beneficiaries. The circumstances will dictate which one or more of the possible courses should be taken by an honest person. He might, for instance, flatly decline to become involved. He might ask further questions. He might seek advice, or insist on further advice being obtained. He might advise the trustee of the risks but then proceed with his role in the transaction. He might do many things. Ultimately, in most cases, an honest person should have little difficulty in knowing whether a proposed transaction, or his participation in it, would offend the normally accepted standards of honest conduct.

Likewise, when called upon to decide whether a person was acting honestly, a court will look at all the circumstances known to the third party at the time. The court will also have regard to personal attributes of the third party, such as his experience and intelligence, and the reason why he acted as he did.

[176]

It always has been the law that a man must have a belief, because, as Lord Bramwell points out in the case of Smith v Chadwick and Lord Herschell in Peek v Derry, a man who affirms that he knows a thing, affirms implicitly that he believes it, and if he does not believe it, that affirmation is false. It is not the less false because the affirmation he makes is an affirmation about the state of his own mind. A man may tell a lie about the state of his own mind, just as much as he can tell a lie about the state of the weather, or the state of his own digestion. It makes, to be sure, the inquiry a difficult and complicated one, and probably an obscure one, as to what the state of his mind may have been, but once arrive at the inference of fact that the state of his mind was to his own knowledge not that which he describes it as being, then he has told a lie, just as if he made an intentional misstatement of something outside his own mind, and visible to the eyes of all men. A great deal of the argument which has been addressed to the Court, arises, as it seems to me, under cover of the fallacious use, first of all, of the principle that you cannot look into a man's mind. It is said you cannot do that: therefore, what follows? It is said that you are to have fixed rules to tell you that he must have meant something, one way or the other, when certain exterior phenomena arise. The answer is that there is no such thing as an absolute criterion which gives you a certain index to a man's mind. There is nothing outside his mind which is an absolute indication of what is going on inside. So far from saying that you cannot look into a man's mind, you must look into it, if you are going to find fraud against him; and unless you think you see what must have been in his mind, you cannot find him guilty of fraud. It seems to me that a second cause from which a fallacious view arises is from the use of the word 'reckless'. Now, what is the old common law direction to juries? And it is not because I think that common law is better than equity that I go back to it - but it is because an action for deceit is a common law action - the old direction, time out of mind, was this, did he know that the statement was false, was he conscious when he made it that it was false, or if not, did he make it without knowing whether it was false, and without caring? Not caring, in that context, did not mean not taking care, it meant indifference to the truth, the moral obliquity which consists in a wilful disregard of the importance of truth, and unless you keep it clear that that is the true meaning of the term, you are constantly in danger of confusing the evidence from which the inference of dishonesty in the mind may be drawn - evidence which consists in a great many cases of gross want of caution - with the inference of fraud, or of dishonesty itself, which has to be drawn after you have weighed all the evidence. (emphasis added)

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FIDOCK -v- LEGAL PROFESSION COMPLAINTS COMMITTEE [2013] WASCA 108 (23 April 2013)

Legislation Cited (5)

Cases Cited (22)